Colonoscopies cost 55% more in hospital outpatient departments compared to ambulatory facilities

December 22, 2023

Source: Wang, et al, JAMA Health Forum December 14, 2023 LINK I used a web plotting tool (Plot digitizer)  to estimate prices from the published graphic.

Researchers reviewed colonoscopy fees reported by large carriers disclosed through federal transparency initiatives, and found that allowable fees for colonoscopies were 55% higher in hospital outpatient departments compared to ambulatory facilities. This was a large study, reviewing over 13,000 facility fees for patients with commercial (private) insurance at over 3500 hospitals and over 17,000 ambulatory facilities. Researchers excluded the top and bottom percent of fees (which sometimes represent clerical errors), and their results were similar to what they found examining data from a large national claims database.

While many members have no cost sharing for screening colonoscopies that are covered as a preventive service, many colonoscopies lead to patient out-of-pocket responsibility. Hospitals might state that they care for sicker patients, but colonoscopy is generally a straightforward procedure, and in most instances can be performed safely and effectively outside of a hospital.

Implications for employers:

-        Location matters!  Plan design can offer lower out-of-pocket cost sharing for procedures done outside of the hospital to encourage patients to seek care in ambulatory procedure facilities. However, many patients do not understand this difference when booking procedures, and many patients are reluctant to place demands on the proceduralist who will be examining their colon.

-        FIT tests (fecal immunochemical tests) are almost as sensitive as colonoscopies, and are much less expensive. FIT tests have no facility fee, though are not appropriate for those who have had previous polyps and positive tests require colonoscopy.

-        Public policy experts often talk about site neutral pricing, which would pay providers the same amount for services regardless of where they are delivered. The House of Representatives passed legislation earlier this month that would institute site neutral pricing for Medicare drug administration, although this doesn’t include procedures like colonoscopies. Hospitals oppose this legislation, fearing that it might lead to lower payments for procedures. Medicare payment methodologies are often later applied to private insurance. 

Thanks for reading.  You can find previous posts in the Employer Coverage archive

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No newsletter on 12/25, and I will be reprinting some earlier posts next week. Hope all have joyous holidays and best wishes for a healthy and meaningful New Year.